Debate ensues over convention center study

May 19, 2011 at 12:19 a.m.

FOLLOW THE MONEYThe city council awarded the $30,000 feasibility study to the Houston branch of PKF Consulting USA.

Money to fund the study will come from the city's general fund. Why not from hotel-motel taxes? Texas law says cities must use those taxes to put heads in beds. That money can pay for the construction of a convention center, but nowhere in the law does it say cities can use that money to study whether to build such a center.

The study will be complete in 60 to 90 days.

Some people are questioning the Victoria City Council's unanimous vote Tuesday to approve a $30,000 hotel and convention center feasibility study.

Why did the city fund a study now and not leave that grunt work to the private sector? Whether you agree with the thinking, here it is:

First, the current community center is outdated and in need of more space, according to a 2009 study. The council wants to know whether the market can support a new or renovated center before spending money on either.

Second, outside investors have been watching Victoria ever since Caterpillar announced it will build a state-of-the-art manufacturing plant here. But because of tight private capital, stiff competition to lure it and Victoria's lackluster population growth, the city must still set itself apart in other ways.

An independent study that might show the city is ripe for development is one way to stand out, the thinking goes.

"Private enterprises could come in here and do their own study, but it hasn't happened," said Victoria Mayor Will Armstrong.

During future negotiations, the study could give the city a competitive advantage, said Phillip McAliley, a Houston-based developer. The city could circulate the study, accept bids and sign on the best deal.

If private developers funded the feasibility study, on the other hand, that data would be unavailable to the city, he said.

"If I paid for the study, it'd become proprietary, and I'd keep it quiet to stay ahead of the competition. I wouldn't share it with anyone," McAliley said. "But if I paid for the study, the investors I try to sell to would think I had a conflict of interest."

McAliley brokered the deal that demolished the old North Navarro Street Toys 'R' Us and built in its place a strip center and Buffalo Wild Wings. He also owns 56 acres on Loop 463 behind Colony Creek - land he wants to develop.

"I'm looking at attracting some kind of entertainment venue - a water park, for example. I want a regional draw," he said. "I'm also considering a hotel."

Of course, McAliley will benefit from the city's study. At no cost to him, the findings will detail the type of hotel corporation or theme park to court.

It's that benefit to some in the private sector that concerns Jeff Williams and others. Williams is a Victoria business owner who said he does not rely on municipal money for private pursuits.

"We've got a lot of local infrastructure where dollars need to be spent," Williams said. "Until all of that is taken care of, I think we're putting the cart before the horse. Plus, my mind keeps asking: Why would I drive through San Antonio, Austin and Houston to come to a convention in Victoria?"

Councilmen Tom Halepaska and Gabriel Soliz note the study might show the market is too weak for a new convention center. Instead, maybe the city needs a conference center - or nothing at all.

Convention centers typically include a hotel to accommodate out-of-town guests, as well as entertainment areas and meeting space. Conference centers offer meeting space. The Victoria Community Center is a multi-purpose building with no hotel.

Neither Halepaska nor Soliz said they know whether Victoria needs a new or bigger convention center. Both men said the study eases their worries about making a costly mistake - building a center in the wrong location or if it's not warranted.

Even if the newly commissioned study shows Victoria can support a new convention center, it's likely a big company that will still review the project's viability. To attract that company, though, the city needs unbiased data, said Dale Fowler, president of the Victoria Economic Development Corp.

"If we're right for convention center, we want to know to what degree," Fowler said. "If we're not right for a convention center, we want to know that, too. The last thing we want to do is promote a development that would be a poor investment. That doesn't help us at all."